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Saturday, June 15, 2024

Drafted bill could remove Gainesville Regional Utilities from City Commission control

Power would go to state-appointed board of utilities

A bill drafted for the Florida House of Representatives could put Gainesville Regional Utilities out of the city’s control. 

Currently, GRU officials are appointed by the city commission and answer to the city. This bill would instead create a state-appointed GRU Authority made up of five volunteer members across the GRU service area, according to a draft obtained by The Gainesville Sun

One member would be a major commercial user and one would be a resident outside of the city limits, according to the draft. The other three would be experts in one or more of these fields: economics, accounting, engineering, finance or energy. A city official told The Alligator the intent is to have the board appointed by Gov. Ron Desantis. 

The bill is drafted by Rep. Chuck Clemons, who represents District 22. That includes Gilchrist County, Levy County and parts of Alachua County, including Gainesville. Clemons has been vocal about taking utilities away from city jurisdiction before — last January, he compared municipal utilities to “taxation without representation.” 

Nearby residents who live outside city boundaries still pay for utilities but often can’t vote for local elected officials, Clemons said. 

Clemons also cited GRU’s debt issues and the city’s $1.7 billion debt as a concern Thursday. The City Commission has shown that it can’t handle regional utilities, he said. 

"I have no confidence that the city commission will take the steps that are severe enough to curtail the bankrupting of the utility," Clemons said.

But from the perspective of Gainesville Commissioner Bryan Eastman, the bill will harm residents, not help them. 

A management change will spike utility rates, he said. After reading reports from GRU’s three rating agencies — FitchRatings, Standard & Poor’s and Moody’s — and listening to financial experts, Eastman thinks GRU’s credibility will decline significantly when the agencies see a switch in governance, hurting Gainesville’s ongoing debt issues further, he said. 

“I would like to think Representative Clemons would not want to hurt his constituents to that level,” Eastman said. “So, I would hope that he would not do something as reckless as this.” 

A similar bill, also authored by Clemons, was put forward in 2018 for Gainesville residents to vote on. It would have created the GRU Authority, appointed by the city commission but otherwise splitting commissioner power away from municipal utilities. The bill failed, earning 40% of the city’s vote Nov. 6. 

Because the city has already voted on the issue, Eastman believes putting a similar bill on the house floor is undemocratic, he said. Clemons has not reached out to the city commission this year to discuss alternative options, and Eastman would rather meet to reach a compromise that didn’t risk rate increases, he said. 

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Republican political consultant Alex Patton, who works for Ozean Media, managed the campaign in favor of the 2018 referendum. He supports taking power over GRU away from the city commission due to an inherent conflict of interest, he said. Commissioners can decide what percentage of utility revenue goes toward the city. 

“You have the fox guarding the henhouse when it comes to budget matters,” he said. 

Similarly to Clemons, Patton thinks the commission has mismanaged GRU consistently, he said. However, because the referendum failed previously, he’s not convinced the bill would be the right move, he said. 

He can see backlash coming from Gainesville residents, he said. However, Patton’s biggest concern about the bill is the status of GRU bondholders. Bond covenants for borrowed money are currently required to be honored by the city commission — that means if costs go up, the government must increase rates or else the bonds can be withdrawn. 

With a new independent board, bondholders could get skittish and withdraw the money now, Patton said. 

“I think that could be a really, really sticky issue for them,” Patton said. 

Mayor Harvey Ward doesn’t support the bill, he said. Having a separate independent board strips the obligation of GRU to answer to the city, he said. 

“I’m elected by the people, so I have to answer to the people, and I want to answer to them,” Ward said. “An appointed board does not have to answer to the people, and would be unlikely to.”

Appointees would be likely to align with Desantis’ politics, Ward said, which would mean a more conservative approach to municipal utilities going forward.

The city commission unanimously approved moving forward with a new solar plant in Archer last Thursday that would provide renewable energy to the city. The solar plant combined with the controversial biomass plant the city bought out in 2017 would have Gainesville running on 80% renewable energy on a good day, Ward said. But if the bill passes, those initiatives could be rolled back. 

“I have not seen a lot of green motion from Representative Clemons over the years,” Ward said. 

The decision to purchase the biomass plant has put the city into debt, he said. But the commission made the decision based on residents’ opinions that clean energy matters, he said, the same as how 60% of residents voted against having an independent GRU board. 

Still, Ward would rather avoid contention with Clemons over city operations. Going on the offensive with someone who represents some of the same people he does is not something he wants to do, he said. 

“There is no reason to start a fight,” he said. 

Still, Ward said, he wants to make it clear he hopes the bill is withdrawn. 

Katy Burnett is a Democrat political consultant and was Ward’s 2022 mayoral campaign manager. The bill is likely to pass due to the Republican-controlled House, she said. 

She also thinks it's likely that down the line, the proposed independently appointed board will agree to sell GRU to a private utility company such as Duke Energy or Florida Power and Light. Both are well known Florida Republican donors. This could be a strong motivator for House representatives to pass the bill, she said, so they continue those good relationships with the companies. 

She would not be surprised by the bill passing through the legislature easily, she said. 

“All of the cards are stacked against us,” Burnett said. 

Eastman, Patton and Ward also said a vote on the bill as drafted will most likely be approved. 

The bill is local, which means it will go through a local delegation made up of four Republicans and one Democrat. Then, it needs approval from a legislative committee. At that point, it can be heard on the House floor. 

This article has been updated to reflect clarifications made to The Alligator by commissioner Bryan Eastman.

Contact Siena at Follow her on twitter @SienaDuncan. 

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Siena Duncan

Siena Duncan is a sophomore journalism major and the graduate school beat reporter for the Alligator. When she's not out reporting, she's typically bothering her friends about podcasts or listening to Metric on repeat. 

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